There's the rumor that the LDS church changed its anti-black policy out of fear that they were going to lose their tax-exempt status.

Is this really true that this could have happened? Can churches lose tax exempt status for having politically incorrect practices or is it purely based on whether the government thinks its just a business? And what exactly are the requirements for tax-exempt status?

Exemption Requirements - Section 501(c)(3) Organizations

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual. In addition, it may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.

Organizations described in section 501(c)(3) are commonly referred to as charitable organizations. Organizations described in section 501(c)(3), other than testing for public safety organizations, are eligible to receive tax-deductible contributions in accordance with Code section 170.

The organization must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization's net earnings may inure to the benefit of any private shareholder or individual. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any organization managers agreeing to the transaction.

Section 501(c)(3) organizations are restricted in how much political and legislative (lobbying) activities they may conduct. For a detailed discussion, see Political and Lobbying Activities. For more information about lobbying activities by charities, see the article Lobbying Issues; for more information about political activities of charities, see the FY-2002 CPE topic Election Year Issues.

Additional Information

Application Process Step by Step: Questions and answers that will help an organization determine if it is eligible to apply for recognition of exemption from federal income taxation under IRC section 501(a) and, if so, how to proceed.
Private foundations - requirements for exemption


Page Last Reviewed or Updated: 2012-11-02

Please tell me when will I receive my taxes I was told six weeks after 2/8/13 and I field on 1/31/13

some say that it was 'Title IX' stuff & church colleges (YBU, Ricks, etc) that were at the root; going against a church itself would be a Minefield.

It is said that actions against Bob Jones University were a caution to TSCC.

I've wondered about this as well. Aren't all 501(c)(3)'s required to submit a 990 and make it public?

Most people don't realize it, but churches get defacto tax-exempt status if they choose to use it (whether incorporated or not).

http://www.irs.gov/pub/irs-pdf/i1023.pdf

Take a look in the lower right corner of the first page of the instructions to apply. It says "may not" but if you dig into the actual regulations you'll see that churches don't have to apply and are given tax exempt status automatically, even without incorporation (which also isn't required). I don't have time to dig through all the regulations, but you can find lots of talk about this and links to the reg's if you google on the topic.

The rules also apply to "churches," and the onus is on Uncle Sam to prove they are not genuine churches. As someone pointed out, the gov may not want to take on a goliath like TSCC.

I've read about all the corporate holdings of TSCC, but I wouldn't be surprised if TSCC itself is not even incorporated at all. Although relatively young as a "church" it's older than the IRS and Federal Income Tax. But I don't know about that, of course--only speculating. But given the penchant for secrecy... incorporating puts you on the radar and subjugates you to all the rules. And if a corp applies for tax-exempt status, the IRS can say "no," but if you never apply, you get defacto tax-exempt status.

In fact, most churches don't incorporate to get tax-exempt status--they incorporate to shield liability. A couple of state's constitutions even disallow churches to incorporate. I know Virginia's did until fairly recently.

How does one become a church?

I've wondered that too, Ex-CultMember.

As a nevermo and non-American, I'm not too knowledgeable about (male) Blacks getting the priesthood and its relationship to TSCC losing its tax-exempt status but I suspect it's not the case.

If racism could force TSCC to lose its tax-exempt status, then surely sexism could, couldn't it? I mean the sort of sexual discrimination that exists within the LDS organization (eg, barring humans with vaginas from positions of authority) is flat out illegal in most of the secular world. And I don't see TSCC being threatened with losing their tax-exempt status over that.

I suspect it was public disgust about such overt racism that made them change. Oh course, this makes me wonder if society is still so sexist that the sexism within TSCC is not given much thought and thus given a pass.

It's truly a disgusting feature of churches. They can act like absolute arseholes and they can do it without contributing financially to the nation's purse. It's so seriously wrong.

(I think I need to go throw something smashable now!)

With the BYU v common sense case back in the day it wasn't about a church being bigoted, it was about BYU being bigoted and using tax dollars to support the bigotry. One must tread carefully when talking about Free Exercise, but when you start talking about tax funded bigotry than it is, and will always be fair game.

We need to remember why churches are granted tax-exempt status. It's to allow the churches to provide more money to the poor, thereby relieving the government of the burden. Pure and simple. It has nothing to do with promoting spirituality or a higher moral code. To the extent that the money is not used for charitable purposes a church forfeits its right to avoid paying taxes.

I don't know if that rule has changed in the last decade, but LDS Inc is carful to not get anywhere even close to the limit.

And their tax exempt status was never in any danger over racism, just as it still isn't in danger over sexism. This is an urban legend that refuses to die because a lot of exmos would like to believe it is true.

There may have been a glimmer of a threat to certain financial aspects of church schools because of racist policies, but a threat to the tax status of LDS Inc itself - nah.

Steve Benson has a detailed write up of the events and pressures leading up to the 1978 policy change, that he posts here from time to time.

I personally think the building of a temple in Brazil was a major cause of the timing of the policy change. I was a missionary in northern Brazil, and more than a few of the members had some African ancestry. Excluding members from the temple based on race would have been an internal and external PR disaster for Mormonism in Brazil. As soon as the temple was announced, I fully expected *something* was going to change.

The policy change was announced 12 weeks before the first Brazilian temple opened for business. Coincidence?



Edited 1 time(s). Last edit at 03/19/2013 06:36AM by Brother Of Jerry.

They're not supposed to be involved in politics, but that rule gets so ignored around election time, by both parties, it is ridiculous.

And before anyone calls me out and says only Republicans engage in such things, a lot of inner city churches went for Obama.